Barking and Dagenham London Borough Council v Watts
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE JACOB,Mr Justice Jacob |
| Judgment Date | 26 February 2003 |
| Neutral Citation | [2003] EWHC 263 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH/2002/APP0672 |
| Date | 26 February 2003 |
[2003] EWHC 263 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Jacob
Case No: CH/2002/APP0672
James Goudie QC and Julian Milford (instructed by Barlow Lyde & Gilbert) for the Appellant
Nicholas Randall (instructed by Thompsons) for the Respondent
Hearing date: 11 February 2003
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The London Borough of Barking and Dagenham appeal from a determination of the Pensions Ombudsman of 23 July 2002. The case concerns the pension of the respondent, Miss Watts. She was originally employed by the Borough of Dagenham and, in due course by the current appellants as successors to that borough. She was employed for many years, over 25. She retired as long ago as 18 June 1972 and has been in receipt of a pension since then. An element of that pension, amounting to £16.50 per month, arises out of the fact on 30 June 1969 the Establishment Committee of the Council awarded her a "long service award" ("LSA") which was paid to her for the last three years before she retired. Since her pension was linked to her pay in the last three years, this resulted in an enhanced pension. It is that enhanced pension which is the subject of this dispute. The Council paid it continuously from the time Miss Watts retired until 3 February 2000 – for just under thirty years. They do not actually seek repayment of what they say they overpaid, though there are perhaps arguments that they could for at least some of the period, or could pay her a reduced pension for the future until the overpayments had been made up. The Council for obvious reasons do not go as far as that, though the logic of their position suggests they could or might be able to do so.
The Council's action arose as a result of advice received in 1998–9 to the effect that the LSAs it had made in the past and the consequent enhanced pensions might be ultra vires and thus unlawful. After a failed attempt by the Council to get Government permission to continue to pay pensions enhanced by LSAs it wrote to Miss Watts on 3rd February 2000 to say she would no longer get the enhanced portion of the pension.
Miss Watts unsuccessfully invoked the internal complaints procedure and an appeal to the Secretary of State. Following that she went to the Pensions Ombudsman. He held that her pension should be reinstated with arrears and interest and that the Council should pay her £250 for distress and inconvenience caused by maladministration.
Principles of an appeal from the Pensions Ombudsman to the Court
The applicable principles are well settled. An appeal lies only on a point of law, as is provided by s.151(4) of the Pensions Schemes Act 1993. So, as Mummery LJ said in Wakelin v Read [2000] Pensions Law Reports 319 at para 40:
"The only question for the High Court and for this court, on appeal from the High Court, is this: is there an error of law in the determination or direction of the Ombudsman? In answering that restricted question the appellate court should be astute not to entertain appeals on points of fact dressed up as points of law. A point of law is one which arises from the wrong application of a legal principle, or from the misconstruction of a statutory provision or from a decision that no reasonable Ombudsman, properly directing himself on the facts and the law, could have reached. In this exercise the written statement of the determination should not be subjected to minute, meticulous or over elaborate critical analysis in an attempt to find a point of law on which the disappointed party to the reference can appeal."
Neuberger J put it this way in Metropolitan Police Service v Hoar [2000] OPLR 267 at p.271:
"In the circumstances, whether or not particular conduct amounts to maladministration is essentially a question of fact for the Ombudsman to determine and the court should be most reluctant to interfere with any of his findings on appeal.
I would also say this. It seems to me that when considering a determination of the Pensions Ombudsman, the court should not pick through it with a view to finding errors or lack of clarity. Any determination by the Pensions Ombudsman should be construed in a beneficent way with a bias, if any bias is appropriate, in favour of upholding it rather than the opposite."
What amounts to maladministration?
Lightman J in Legal & General Insurance v Pensions Ombudsman [2002] 2 All ER 577 at p.587 pithily put it thus:
"The concept of "maladministration" is broad … it is concerned with the decision making process rather than the merits of the decision … the jurisdiction to investigate maladministration does not enable the ombudsman to reopen and investigate the merits of the terms of [the contract in that case]."
More generally the concept was considered by Lord Denning MR in ex parte Bradford Metropolitan City Council [1979] 2 All ER 881 at p.898C. I do not go to this or other cases because there was no dispute between Mr Goudie QC (for the Council) and Mr Randall (for Miss Watts) on this point.
Was there maladministration here?
The Ombudsman found maladministration in the Council's decision to reduce the pension. He reasoned thus: Miss Watts' LSA was granted for a proper purpose and hence lawfully. So the Council was wrong to conclude otherwise. And its consequential decision to reduce the pension was thus maladministration.
Now I think there is a gap in logic here. Actually the Council in reaching its decision acted with thoroughness and care, for instance taking counsel's advice and even trying to get authorisation to pay the enhanced amount. It is not suggested that the decision reached was perverse – one that could not be reached by any Council acting reasonably. There was material upon which it could fairly reach its conclusion – and, given its general duty not to make ultra vires payments, its decision to withdraw the enhancement cannot be said to have been reached by any maladministration – some error in the decision making process. It seems to me that the Ombudsman fell into error here: his decision no-where faults the process by which the Council reached its conclusion. It amounts to "acting on a mistaken view of the law = maladministration". Accordingly I think the decision to award Miss Watts £250 compensation for maladministration was an error because there was none.
The lawfulness or otherwise of the enhanced pension
I turn to the really important point on this appeal, whether the enhancement should have been withdrawn. For there is no dispute but that the Ombudsman has jurisdiction to decide a question of law relating to a pension see s.146(1)(c) of the Pension Schemes Act 1993.
Onus
The Ombudsman began by considering onus. He said that the onus lay on Miss Watts to prove her entitlement to the LSA payment and hence the enhanced pension. Mr Goudie QC for the Council submits that this was correct but that the Ombudsman then failed to apply the onus to this case. I do not agree. I think the Ombudsman was entirely correct in his approach. The correct analysis of the position runs thus:
(1) The legal burden of proof of entitlement to the LSA (and indeed of the whole pension) lay on Miss Watts. Suppose for example the Council simply did not pay and she claimed the pension. It would not be good enough for her to put in a document saying "I claim a pension of £x per week" without saying anything else at all. Anyone could do that. A claim put thus baldly would not then require the Council to disprove entitlement.
(2) Although that is legal burden, the evidential burden can shift. In this case Miss Watts not merely claimed entitlement to the enhanced pension. She also "proved" (though in reality this was never in dispute) that it had been paid, with enhancement, continuously and without cavil, quibble or question, for nearly 30 years. That entirely changes the complexion of things. For, as a matter of common sense one assumes that things have been done properly. (This used to go by the maxim omnia praesumunter rite et solemniter esse acta, Co. Litt. 6). Under some pressure Mr Goudie accepted that if Miss Watts claimed the full pension and proved it had been paid for nearly 30 years and there was no other evidence whatever, she would succeed.
(3) So once it was shown that the enhanced pension had been paid the evidential onus shifted to the Council to show that there was an error.
(4) I accept also Mr Randall's further submission on behalf of Miss Watts: that it in this case it was a heavy onus – for what the Council are saying now is that it acted unlawfully back in 1968 when the LSA was awarded and persisted in that unlawfulness until February 2000.
I do not think, however,...
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